The costs of health care today are rapidly increasing as the health care industry becomes more complex, specialized and sophisticated. Health care costs have more than doubled during the past decade, rising to $676 billion today. The federal government predicts health care cost increases of 12-15 percent each year for the next five years.
Over the years, the delivery of health care services has shifted from local physicians to large managed health care organizations. This shift reflects the growing number of medical, dental and pharmaceutical specialists and the complexity and variety of health care options and programs. This complexity and specialization has created large administrative systems that coordinate the delivery of health care between health care providers, administrators, patients, payers and insurers. The cost of supporting these administrative systems has been steadily rising, contributing to today's rising costs of health care.
One area for lowering administrative costs is the review and adjudication of health care provider payment requests. Such payment requests typically include bills for procedures performed and supplies given to patients. Careful review of payment requests minimizes fraud and unintentional errors and provides consistency of payment for the same treatment.
Unfortunately, present decision techniques for adjudicating payment requests are manual-based systems which are complex, labor intensive and time consuming. The number of payment requests can be staggering. For example, a large health care management organization may review more than 75,000 requests each day or 25 million payment requests each year. Because of the overwhelming administrative costs of an in-depth review of each of these requests, a majority of these requests are simply paid without extensive review.
Present manual decision techniques for performing an in-depth review of payment requests requires trained health care professionals, known as medical analysts, who are familiar with terminology and practices of the medical profession. Often medical analysts have been trained as registered nurses or surgical technicians with a medical surgical background. In addition to their medical training, medical analysts may receive up to one year of additional training in how to review payment requests before they are able to analyze payment requests properly.
To manually review a payment request, the medical analyst begins by categorizing the payment request according to the priority of the type of review required. The type of review varies depending on the procedures and supplies to be reviewed for payment.
The medical analyst then examines the payment request to see that the procedures for which payment is requested are valid and consistent with current medical procedures. A primary reference for medical analysts is a volume titled Physicians' Current Procedural Terminology (CPT) which is maintained and updated annually by the American Medical Association. This book contains a listing of descriptive terms and numeric identifying codes and code modifiers for reporting medical services and procedures performed by physicians. Thus, the CPT describes procedures and services consistent with current medical practice and lists a corresponding procedure code that is stated on a payment request.
Next, the medical analyst reviews the history of prior payment requests for the patient to ensure that the current payment request is consistent with the historical requests and to determine if the historical requests will affect payment of the current request. Earlier requests may affect payment of the current payment request depending on the contractual arrangements among the provider, patient and payer. For situations where more than one surgical procedure is performed on the same day, about two thirds of the payment requests reviewed by medical analysts typically require review of historical payment requests. During adjudication, each historical payment request is examined manually. This is very time consuming because frequently prior payment requests do not have any effect on the current request the analyst is examining, yet the analyst must look at them.
After examining the historical payment requests, the medical analyst next compares the payment request with the contractual obligations of the payer to determine whether or not to pay the request and if payment is to be made, what amount to pay. These contractual obligations change frequently and involve complex relationships between payers and health care providers. The amount of payment will vary by the service or procedure, by the particular contractual arrangements with each provider or physician, by the contractual arrangements between the payer and the patient regarding who pays for what procedures and treatments to what extent, and by what is considered consistent for this procedure under current medical practice.
One example of a special contractual relationship between a payer and a health care provider occurs, on occasion, when a payer offers a physician more than the standard fee. This may occur when the physician is in a rural or remote area and practices a particular medical specialty or performs particular procedures, and, by paying a higher than usual fee, the payer hopes to encourage the physician to remain in the rural area and to continue to provide the specialized services to people in the area.
An example of the complex contractual relationship between payer and health care provider occurs when a provider performs more than one surgical procedure on the same patient in the same day. The amount of payment depends on several factors, such as, for example, whether the operation was performed through one incision or two incisions or through a physical opening such as an ear or nose, whether the contractual arrangements distinguish between bilateral procedures, requiring two incisions for performing the procedure on each side of the body, and non-bilateral procedures, whether the position and number of incisions are consistent with current medical practice for performing the procedure, whether other procedures followed by the physician are consistent with current medical practice, how much the physician has requested as payment for each procedure and whether the physician receives more or less than the standard fee for performing this procedure.
For example, a physician specializing in ear, nose and throat, may perform a procedure called a tympanostomy, which involves inserting a ventilating tube in a child's ear to minimize ear infections. The amount of payment to the physician for a tympanostomy depends on several factors, including: whether the operation was performed through one or more incisions, whether the position and number of incisions made are consistent with current medical practice for performing a tympanostomy, whether payer/provider contractual arrangements distinguish between placing tubes in both ears at the same time and placing a tube in each ear in separate operations on separate days, whether any other procedures followed by the physician are consistent with current medical practice for performing a tympanostomy and whether the physician has requested the full amount payable by the payer for performing a tympanostomy.
The medical analyst relies on several sources of information to make these decisions such as the CPT and manuals detailing contractual relationships among payers, providers and patients. Many of these sources are dynamic, changing frequently to reflect new medical procedures and cost structures. Presently, medical analysts stay current with new medical practices and payer payment obligations via notices and announcements made at periodic medical analyst meetings. The typical medical analyst records these changes in meeting notes or relatively unorganized pencilled notes in the reference volumes. With so much complex interrelated information changing constantly, it is difficult for medical analysts to keep their knowledge up-to-date.
The increased workload can become overwhelming to current medical analyst staffs, sometimes causing inconsistent and shallow payment reviews, resulting in further review cycles and possibly legal ramifications. Increasing medical analysis staff is a costly measure and not necessarily an efficient or effective solution.
Though it would be possible to organize the medical analyst's resources in a more organized, accessible form electronically, conventional programming methods do not allow for such complex, integrated information to be changed frequently, updated quickly and melded easily with historical payment requests in order to review and adjudicate payment requests quickly and accurately without extensive human intervention.
An example of using conventional programming methods to computerize the adjudication of payment requests is the Gabriel Management Information System (GMIS) marketed by GMIS of Philadelphia, Pa. The GMIS system includes a large database of relatively fixed, permanent tables that contain the payment patterns for different combinations of procedure codes. Storage of such a large database typically requires the resources of a computer mainframe system. As those skilled in the art will appreciate, accessing data contained in such a large database on a mainframe is processor intensive. Maintenance of such a large database is staggering because the database is so unwieldly. It generally takes about six months to update the database with the annual changes in the CPT manual alone. In addition, a large database created using conventional computer techniques such as the GMIS system is not flexible enough to vary the payment patterns based on information contained in historical payment requests. Consideration of historical payment requests is critical to adjudicating a payment request completely and accurately.
A method and apparatus that minimizes the use of expensive mainframe resources and is capable of storing and organizing the great amount and complexity of information required to adjudicate payment requests in a form that is readily accessible despite frequent changes and updates, of pre-screening historical payment requests to determine which requests are relevant for a particular review, of analysing and making payment decisions based on relevant historical payment requests, current medical practices and contractual arrangements between payer and provider or between payer and patient would be a great benefit. The creation of such a method and apparatus would increase medical analyst productivity, provide consistent payment of payment requests and help lower the costs of health care.